Aggregate Q1 Loss Expected For S&P 500 Energy Sector by John Butters, FactSet
Exxon Mobil and Chevron will also be focus companies for the market during the upcoming week, as both companies are scheduled to report earnings for the first quarter on April 29. The current mean EPS estimate for Exxon Mobil for Q1 2016 is $0.31, compared to year-ago actual EPS of $1.17. The current mean EPS estimate for Chevron for Q1 2016 is -$0.13, compared to year-ago actual EPS of $1.06.
Exxon Mobil and Chevron are companies in the Energy sector. The Energy sector is reporting the largest year-over-year decline in earnings of all 10 sectors in the S&P 500 at -110.3%. The year-over-year decline is larger than -100% because the sector is reporting an aggregate loss for Q1 2016 (-$1.33 billion), compared to aggregate earnings of $12.92 billion in Q1 2015.
Corsair Capital was down by about 3.5% net for the third quarter, bringing its year-to-date return to 13.3% net. Corsair Select lost 9.1% net, bringing its year-to-date performance to 15.3% net. The HFRI – EHI was down 0.5% for the third quarter but is up 11.5% year to date, while the S&P 500 returned 0.6% Read More
More than Half of Energy Companies Expecting Losses
Of the 39 companies in the S&P 500 Energy sector, 22 have reported or are expected to report a loss in EPS for the quarter (including Chevron).
If the Energy sector reports an aggregate loss for Q1 2016, it will mark the first time any sector in the S&P 500 has reported an aggregate loss since Q4 2008. In Q4 2008, the Financials sector reported an aggregate loss of -$59.0 billion for the quarter.
The Energy sector is also the largest contributor to the earnings decline for the S&P 500 as a whole. If the Energy sector is excluded, the blended earnings decline for the S&P 500 would improve to -3.6% from -8.9%.
S&P 500 Energy Sector
Increases Expected Soon in Oil Prices
However, it is interesting to note that analysts believe Q1 2016 will mark the bottom both in terms of year-over-year declines in earnings for the S&P 500 Energy sector and in terms of the average price of oil. Since the end of the first quarter, the price of crude oil has increased 12.6% (to $43.18 from $38.34). Over the next few quarters, analysts believe the average price of oil will increase on a sequential basis, and analysts also believe the year-over-year declines in earnings for the Energy sector will decrease on a sequential basis.
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